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Midtown rezoning plan heads to final vote

October 16, 2013

Since it first began as one of New York’s commercial centers almost a century ago, the area surrounding Grand Central Terminal has been defined by its redevelopment. Its latest revitalization, the plan to rezone Midtown East section of Manhattan, recently took another significant step forward. Following Manhattan Borough President Scott Stringer’s recommendation to approve the rezoning, the City Planning Commission voted 11-0 in favor of the plan (with one abstention and one recusal) on September 30th. The proposed rezoning now moves to City Council for final consideration next week.

The Department of City Planning’s plan to modernize the Midtown East business district will: satisfy tenant needs; promote energy efficiency and sustainability; and substantially improve the area’s built environment and transit network; all while providing crucial new tax revenue for the City and creating thousands of well-paying construction and permanent jobs.

Often lost in the public debate over the details of the Midtown East rezoning is the fact that the plan will create tens of thousands of well-paying middle class jobs in the construction, building service, and hospitality industries. Redeveloping roughly 10M square feet of existing space and creating 4.5M square feet of new office space will employ tens of thousands of workers in the construction industry alone, as the City noted in its testimony before the City Planning Commission. Given the scale and complexity of the buildings envisioned for Midtown East, one should expect that the overwhelming majority of the construction to be union-built. If area employment patterns hold true, these new buildings will be staffed by more than a thousand union building services workers. While the large hotel special permit, which may be further strengthened at the City Council, will likely result in many unionized hotel worker positions.

The plan’s timing is ideal as the City’s Independent Budget Office recently found that the need for office space over the next 30 years may be as high as 87 million square feet—more than a full build-out of Hudson Yards, the World Trade Center site, and a rezoned Midtown East combined. The rezoning will also provide funding for numerous enhancements to the transit and pedestrian network and public realm without asking the taxpayers to shoulder the burden. These projects, including more than $500M of new investment in Grand Central and the surrounding public space, will be paid for by a District Improvement Fund, which smartly ties infrastructure improvements to redevelopment projects.

In response to requests from advocates such as Borough President Stringer and City Councilmember Daniel Garodnick, the City will advance funding for some of the mass transit and open space improvements in the district. It is clear that delaying the approval of this rezoning to a subsequent mayoral administration—as some critics have suggested—will only deprive the area of a key source of funding for much-needed improvements to the area’s public infrastructure.

Through the implementation of the Midtown East rezoning and other similar redevelopment projects, the City can meaningfully address the need to create good, middle class jobs and help to ensure that our economy continues its recovery. The City could accomplish this needed goal while continuing what it described as a “history of near-continual reinvestment” in its Final Environmental Impact Statement for the plan.

We applaud the Department and the administration for their thoughtful planning and diligent engagement with stakeholders. Our industry and the community urge the City Council to approve this rezoning, which addresses a serious need for modernization and ensures that New York City’s most important business district will stay competitive in a global economy for years to come.

In other REBNY News:

The REBNY Residential Brokerage Division Deal of the Year Charity and Awards Gala Committee celebrates their 25th anniversary at this year’s gala. The 2013 Deal of the Year will be awarded along with recognition of all twenty-five years of past winners. The event will begin at 6:30pm and end at 11pm on Thursday, Oct. 24th at the Pierre. For more information, contact Jeanne Oliver-Taylor, jtaylor@rebny.com.

The New York City Housing Authority (NYCHA) requested we remind REBNY members of the Request For Expressions of Interest (RFEI) they issued for 14 development sites on 8 developments in Manhattan, south of 110th Street, and that proposals are due by November 18, 2013. You may download needed documents by going to www.nyc.gov/nycha and clicking on “Preserving Public Housing.” Then click on “Land Lease Opportunity” and then “RFEI”. For more information, contact REBNY’s Michael Slattery at mslattery@rebny.com.

Finally, please save the following dates. This year’s Members’ Luncheon will be held on Tuesday, Nov. 19, 2013 in the Grand Ballroom of the New York Hilton Midtown Hotel from 11:45am to 2pm. And on Wednesday, Nov. 20th, Mist Harlem Events will host the Upper Manhattan Roundtable Discussion from 5:30-9pm at 46 West 116th Street.

John Banks, REBNY President
Mr. Banks authors REBNY Watch, this weekly column highlighting timely topics in real estate. It is published in the print version of Real Estate Weekly.